Randall Pty Limited v Chepan Pty Limited

Judgment (ex tempore) 1HIS HONOUR: By originating process filed on 29 June 2012, the plaintiff Pro Carwash Pty Ltd (ACN 145 344 190) seeks orders pursuant to (Cth) Corporations Act 2001, s 459G, setting aside a statutory demand dated 7 June 2012 served on it by the defendant, Travmatt Construction & Shopfitting Pty Ltd (ACN 103 784 292). 2There are two major issues in the case. The first is whether the statutory demand ought be set aside on the basis of a defect in it, pursuant to s 459J(1), and the second is whether it ought be set aside on the basis that there is a genuine dispute as to the indebtedness referred to in it, pursuant to s 459H. 3By a contract of works dated 16 August 2011, the cover sheet of which bears the letterhead of "Travmatt Construction & Shopfitting Pty Ltd", the parties were identified as: owner - "Pro Carwash - Stan Kaftel ABN 17 145 344 190", and builder - "Travmatt Construction & Shopfitting ABN 74 578 517 747". There was a signature by a director on behalf of the builder, and, it would seem, by Mr Stan Kaftel as chief executive officer "on behalf of Pro Carwash Pty Ltd". 4Subsequently, invoices for progress payments were issued, each of them addressed to Pro Carwash Pty Ltd, attention Stanley Kaftel; each of them on letterhead marked Travmatt Construction & Shopfitting Pty Ltd; each of them bearing ABN 74 578 517 747, which corresponds with the ABN of the builder in the contract, but one of themm dated 17 August 2011, also bearing, above the ABN, the name "Travmatt Group Pty Ltd t/as Travmatt Construction & Shopfitting Pty Ltd" and below the ABN "ACN 132 230 883". 5Three progress payments were made by cheque drawn on the plaintiff, Pro Carwash Pty Ltd. Ultimately, when subsequent progress payments were not paid, application was made for an adjudication under the (NSW) Building and Construction Industry Security of Payment Act 1999. The application form identified the builder as Travmatt Group Pty Ltd as trustee for Travmatt Group Trust, with the trading name Travmatt Construction & Shopfitting ABN 74 578 517 747, ACN 132 230 883. Thus, on at least two occasions, in its application form and in the invoice of 17 August to which I have referred, the ABN identified in the contract was linked with the company, Travmatt Group Pty Ltd t/as Travmatt Construction & Shopfitting. The respondent was identified as Stanley Kaftel t/as Pro Carwash. 6Ultimately, an adjudication certificate issued in favour of Travmatt Group Pty Ltd as trustee for Travmatt Group Trust t/as Travmatt Construction & Shopfitting ABN 74 578 517 747, against the respondent, Stanley Kaftel t/as Pro Carwash ABN 17 145 344 190. 7Stanley Kaftel became bankrupt by sequestration order made on 8 February 2012. When the defendant discovered this, or otherwise realised the difficulty of enforcement against him, it issued the creditor's statutory demand in question. That statutory demand was addressed to Pro Carwash Pty Ltd ACN 145 344 190, and identified the creditor as Travmatt Construction & Shopfitting Pty Ltd ACN 103 784 292. That ACN does not appear at any earlier stage of the documentation, either in the contract or in the invoices. Although it is true that the name Travmatt Construction & Shopfitting Pty Ltd appears on the letterhead of the contract, that particular description does not correspond, at least precisely, and the ACN distinctly does not correspond with that in the contract. 8In my view, there is a plausible contention requiring investigation that Travmatt Construction & Shopfitting Pty Ltd ACN 103 784 292, the present defendant, was not a party to the contract in question, and is not a creditor of the plaintiff (or, for that matter, of Stanley Kaftel), but rather that Travmatt Group Pty Ltd t/as Travmatt Construction & Shopfitting is the correct creditor. It may be that further investigation and searches are able to refute this contention, but on the material presently available there is a plausible contention requiring investigation to that effect. 9It was also argued that there was a plausible contention that Stanley Kaftel and not Pro Carwash Pty Ltd was the relevant debtor. While it is true that the adjudication application was made against Stanley Kaftel t/as Pro Carwash, and the adjudication certificate unsurprisingly issued in the same terms, it seems to me, on the evidence as a whole, quite clear that this was wrong, and that the relevant party to the contract was Pro Carwash Pty Ltd. This follows from the signature "on behalf of Pro Carwash Pty Ltd", and from the payment of the progress payments by cheques drawn on Pro Carwash Pty Ltd. Any contention that Stanley Kaftel and not Pro Carwash Pty Ltd is the relevant debtor is not a plausible one requiring investigation, but can, on the present evidence, be rejected out of hand. 10It is implicit in that conclusion that the adjudication certificate is in error, and accordingly it would be expected that steps be taken by the party that procured that certificate to have it corrected or set aside so as to reflect the correct position. It would of course be quite inappropriate for that adjudication certificate in its erroneous form to be registered in a court so as to give rise to an enforceable judgment. 11Finally, it was argued that the creditor's statutory demand was defective, essentially on the basis that it omitted the warning required by the amended form of creditor's statutory demand prescribed under the (Cth) Corporations Regulations 2001, Form 509H. The form of the statutory demand followed Form 509H as it was prior to the amendment to the form introduced by the (Cth) Corporations Amendment Regulations 2007 (No 13), which amended the prescribed form of statutory demand by requiring the inclusion, in bold type and in a box, of the following warning: A failure to respond to a statutory demand can have serious consequences for a company. In particular it may result in the company being placed in liquidation and control of the company passing to the liquidator of the company. That warning has been required to be included in statutory demands since 1 January 2009: there was a 12-month transition period, which expired on 31 December 2008. 12White J considered identical circumstances in Randall Pty Limited v Chepan Pty Limited (2009) 73 ACSR 267, where his Honour observed (at [13]) that there was no question but that the omission of the required warning was a defect in the demand, but nonetheless the demand was not liable to be set aside on that account unless failure to do so would cause substantial injustice. There was no evidence that the omission of the required warning had any impact on the plaintiff; that was to say, there was no evidence that the plaintiff omitted to do anything that it would have done, or that it did anything it would not have done, had the required warning been included [see also, JSBG Developments Pty v Kozlowski [2010] NSWSC 97 (Palmer J)]. 13As in that case, so in this case there is absolutely no evidence that on account of the absence of the warning the plaintiff omitted to do anything it would have done, or did something it would not otherwise have done on account of the absence of the warning. It is worth noting, in any event, that the creditor's statutory demand contained, in paragraph 3, a note that a creditor could rely on failure to comply with the demand as a ground for an application to a court for the winding up of the company, and in paragraph 4, that an application to set aside the demand must be made within 21 days. 14On the authorities to which I have referred, the argument that the omission of the warning was a defect on account of which the demand should be set aside must fail, in the absence of some evidence, or some ground for supposing, that a substantive injustice to the plaintiff was occasioned by its omission, of which there is none. 15Nonetheless, on account of the plausible contention that Travmatt Group Pty Ltd t/as Travmatt Construction & Shopfitting and not the defendant is the correct creditor, the demand must be set aside. 16I order that the statutory demand dated 7 June 2012 served by the defendant on the plaintiff on 11 June 2012 be set aside. 17I order that the defendant pay the plaintiff's costs.